In this country, individuals and investors benefit from an absence of legislation in the field of cryptocurrencies.
In a short time, Portugal has become the new tax haven for cryptocurrency investors.
“With 0% tax on investments in cryptocurrency, Portugal has a perfect system”, explains Didi Taihuttu, a Dutchman who settled in this Iberian country to benefit from a legal vacuum curbing the taxation of these virtual assets. . “It’s a paradise for Bitcoiners”, underlines this forties, who became famous for having made a fortune by investing all his savings in this technology created fifteen years ago, during a telephone interview with AFP.
After having radically changed his life five years ago, this father has now settled down in the south of Portugal, where he wishes to found the first “crypto-village in Europe”, with the initial construction of 25 houses intended to welcome “bitcoiners” from all over the world.
For investors like him, “Portugal has become very attractive due to the lack of legislation in this area”, explains Susana Duarte, lawyer at the Abreu firm, which is experiencing growing demand from foreigners wanting to settle. in Portugal for this reason.
According to Portuguese law, transactions in cryptocurrencies (bitcoin, ethereum, solana, dogecoin, etc.) “are not taxable” because they are not considered currencies or financial assets, according to an opinion issued by the tax authorities. in 2016.
Individuals do not have to pay VAT or capital gains tax when buying and selling assets, and only professional activities remunerated in crypto-assets are taxed.
“Very flowing” taxation
Like Malta in particular, Portugal is thus an exception in Europe, at least for the moment, because the Lisbon government, a socialist executive renewed last January with a comfortable majority, has recognized that it will have to end up look into the matter.
Until further notice, his position is to wait for the adoption of a “common strategy” at European level, had indicated before the elections the Secretary of State for Fiscal Affairs Antonio Mendonça Mendes to the weekly Expresso.
“Portugal is one of the destinations that attract Europeans, with very, very low taxation for crypto. On the other hand, we do not necessarily recommend it because it is not a long-term strategy for the government to attract companies from the sector but rather a legal vacuum”, confirms a tax lawyer based in London, who wishes to remain anonymous because of his advice to fortunes in cryptocurrencies.
“I bet that in ten years, the City will be more lenient than Portugal”, he adds while the United Kingdom is one of the European countries wishing to become the homeland of cryptocurrencies on the Old Continent, the British Treasury having announced early April working on new, more flexible regulations for this sector.
Risk of “bubble”
“Portugal has become a tax haven”, regrets for her part Mariana Mortagua, deputy of the Left Bloc (extreme left), who calls for urgent regulation.
“It is difficult to justify that other financial assets are taxed at around 28% and not cryptocurrencies”, also recognizes Pedro Borges, head of Criptoloja, the first digital asset trading platform registered with the Bank. from Portugal.
Concerned that the crypto-asset market has reached the size of that of subprime mortgages, which caused the last major financial crisis, the European Central Bank (ECB) has called for its international regulation.
Regulators must “move faster” to ensure that crypto-assets “do not trigger an anarchic risk-taking frenzy”, synonymous with a “bubble”, said this week Fabio Panetta, member of the ECB’s executive board.
But, for Didi Taihuttu and his “bitcoin family”, Portugal would be making “a mistake” if it were to modify legislation which, according to him, offers a unique opportunity for development.
According to the Dutch investor, this country could be the global “nerve center” of digital currencies for companies in the blockchain sector, the technology at the heart of the creation and use of cryptocurrencies.